We thank an anonymous referee for extensive comments. We also thank John A. Doukas (the editor), Mats Godenhielm, Bob Hunt, Ari Hyytinen, Pasi Ikonen, David Mayes, Otto Toivanen, and Ari Vepsäläinen and seminar participants at the IPR and Growth Conference at the Abbey of Pontlevoy, the XXVII Summer Meeting of the Finnish Economists, the XXXII Annual Meeting of the Finnish Economic Association, the Federal Reserve Bank of Boston, and the Helsinki School of Economics for useful feedback. We are also grateful to Matthias Deschryvere, Jouko Berndtson, Anni-Mari Karvinen, and Grid Thoma for their comments and help with data collection. Takalo thanks the Faculty of Economics at the University of Cambridge for their hospitality and the Jenny and Antti Wihuri Foundation and Yrjö Jahnsson Foundation for funding.
Does State Street Lead to Europe? The Case of Financial Exchange Innovations
Article first published online: 4 JUN 2013
© 2011 John Wiley & Sons Ltd
European Financial Management
Volume 19, Issue 3, pages 521–557, June 2013
How to Cite
Komulainen, M. and Takalo, T. (2013), Does State Street Lead to Europe? The Case of Financial Exchange Innovations. European Financial Management, 19: 521–557. doi: 10.1111/j.1468-036X.2010.00600.x
- Issue published online: 4 JUN 2013
- Article first published online: 4 JUN 2013
- Finance patents;
- business method patents;
- stock exchanges;
- management of financial innovations;
- patent policy
We study whether financial exchange innovations are patentable in Europe. We find that exchange-related patent applications surged after the State Street decision. The majority of the applications come from the USA, investment banks and exchanges being among the most active innovators. But the applications seldom result in valid patents, and the post-grant opposition rate is very high. The evidence suggests that patentability standards for financial innovations have not weakened in Europe after the State Street decision and that the combination of inventive step and technical contribution requirements constitutes a major obstacle for applicants seeking financial patents in Europe.